President Donald Trump is considering a deal that would significantly ease the tariff blow to carmakers that assemble vehicles in the U.S.
The details: According to Republican Senator Bernie Moreno and unnamed auto officials, the move would alleviate nearly all of the pain U.S.-based automakers are feeling from the levies, Reuters reports.
The modification would keep tax rebates for U.S.-assembled vehicles at 3.75%, extend the rebates to five years, and offer new incentives for U.S. engine production.
Moreno, a former auto dealer, said the move would make Ford, Toyota, Honda, Tesla, and GM (leaders in U.S. vehicle volume) “immune” from the tariffs.
What they’re saying: “The signal to the car companies around the world is look, you have final assembly in the U.S.: we're going to reward you," Moreno told Reuters.
Why it matters: An expanded tax rebate program for U.S.-assembled vehicles could transform tariffs from a burden into a tool to promote domestic manufacturing—potentially redrawing global supply chains and reinforcing an America-first industrial policy with significant economic and political stakes.
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Between the lines: News of the proposed tariff relief comes as the impact of current trade policies becomes more apparent for automakers navigating what many describe as an increasingly complex levy system.
General Motors estimates tariffs will cost the company between $4 billion and $5 billion this year.
Ford expects the levies to impact its operating profit by roughly $2 billion.
Stellantis has warned that its earnings will be hit by about $1.7 billion due to tariffs.
Worth noting: In a September report, auto supplier consultant Warren Browne projected that U.S. vehicle production will slide to 10.45 million units this year from 10.8 million in 2024—largely because of tariffs.
What they’re saying: “Planning for a future with higher vehicle tariffs is prudent,” said Browne, a former GM executive (via The Detroit News). “Consequently, the outlooks for U.S. production and employment remain with tariffs included.”
Bottom line: If Trump’s proposed tariff relief plan takes effect, U.S.-based automakers, and dealers, could gain critical breathing room through steadier supply, costs, and pricing.
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